Maybe Pixy or someone can answer this for me:

I have a friend who is drawing a small (~$550) per month SS Benefit. Needless to say, she needs additional income, so she has a tiny business answering telephones which nets her after expenses ~$3,000 per year, and for which she has to file a Schedule C. She owes no income tax, obviously, but she has to pay ~$460 Self Employment Tax. She is over 70 and therefore does not report her earnings to SS, and has no way of collecting any additional benefits from SS.

Is there any way she can get around paying the Self Employment Tax? IRS says if you have any Self Employment Income, you have to file a Schedule C, so I guess it would be out of the question not to file, even though she is below the income threshold for required filing.

Does anyone know something I don't know about a way to avoid the SEP? That $460 would be like a million $ to her.